Friday, January 8, 2010

State of the Market - 1/8/10

We saw a very boring, anti-climactic day today on Wall Street, as a disappointing jobs number failed to inspire much action by the bulls or bears today, and the markets basically moved sideways after some early vacillation. From lunchtime on, the S&P traded in about a three point range until around 3:40, when the market bounced into the close a bit. We did see a reversal of the pattern of the past two days, with the Nasdaq outperforming the S&P, unlike Wednesday and Thursday. Volume was lower as can be expected.

Technically, the picture remains the same - the S&P is right at the top of an uptrend channel and the Nasdaq is consolidating, just barely finishing above resistance. Financials pulled back a bit which is to be expected, and the oil sector is looking good to me after being quite overbought earlier in the week. XLE looks like it is consolidating instead of pulling back which is typically good news. Another day or so of rest would set it up nicely.

With the momentum names moving early, I did enter two positions this morning - NANO at $11.95 and RINO at $31.45ish. I was watching CAGC as well (posted on Twitter) but it just moved too fast and I didn't get in, going with RINO instead. I was also stopped out of my ERY hedge at $9.81, breaking even there with just the slightest of gains (a total of $11 - wow). NANO acted pretty well intraday, but RINO could never get any more momentum going after the first push and I will likely be back out of that soon.

I did start small positions in two stocks near the end of the day - KONG at $13.26 and CHINA at $2.70. I like the setups in the daily charts, which look poised to move higher. I am anticipating a bit, however, and that can get me in trouble, so we'll see.

Going through my scans, I do see quite a few other nice setups on the long side and I will be putting those in a video this weekend. Based on most of the individual charts I see, it looks like the market wants to go higher from here. There were many extended momentum stocks just a few days ago, but very few if any of them have crashed down to earth, instead just pulling back somewhat quietly. That is bullish action so that's what I am looking for next week.

At the same time, I did see some interesting tweets on Twitter today dealing with sentiment...

I found that tweet interesting and just wanted to point that out and keep it in the back of my mindand perhaps yours. Don't ever get too comfortable in your opinion as a trader - it's when things look easiest that the market ruins your best laid plans.

It doesn't have to happen, but all signs point to further gains in a lot of stocks. We'll see what next week brings us. Take care and enjoy the weekend.

Overall Market Timing Score

March 20, 2014 -2March 19, 2014 +1(Max Score +6, Min Score -6)

The Market Timing Score has six factors that I record on a daily basis. These include breadth indicators, moving average indicators, accumulation and distribution indicators, and overbought and oversold indicators.

The max score of the Market Timing Score is +6, but this is very rare. Typically a score of +4 or +5 tells you that the market is very bullish. A score of +3 or +2 tells you that the market is bullish, but there are a few reasons for concern. A score of +1 or 0 tells you that cash is the best place to be. The scores work the exact same way on the negative side for bearish markets.

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Chart Swing Trader is a website intended for the education of online stock traders. The website is an information service only. The information provided herein is not to be construed as recommendations to buy or sell stocks of any kind. They are simply the opinions of the author. It is possible that the editor of this blog may own, buy, or sell stocks presented. All investors should consult a qualified professional before trading any stock. The author is not an investment advisor. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts made by the author are committed at the reader's own risk, financial or otherwise.